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Nigeria's Buhari seeks approval to borrow $6.93 billion from China, World Bank
April 26, 2017 / 9:17 PM / 5 months ago

Nigeria's Buhari seeks approval to borrow $6.93 billion from China, World Bank

FILE PHOTO: Nigerian President Muhammadu Buhari speaks during his meeting with U.S. President Barack Obama at the United Nations General Assembly September 20, 2016. REUTERS/Kevin Lamarque/File Photo

ABUJA (Reuters) - Nigerian President Muhammadu Buhari is seeking parliament’s approval for a proposal to borrow $5.85 billion from China to modernize its rail network and another $1.075 billion from the World Bank to help rebuild the insurgency-torn northeast.

Buhari urged parliament in a letter to approve the railway borrowing because China has a limit on funds available from its China Africa Fund. The president wants to sign loan agreements as soon as China approves the project.

“These loans form part of the overall money for the rail strategy,” Buhari said in the letter. The loans are part of the government’s 2016-2018 foreign borrowing plan, he said.

Buhari also asked lawmakers to also approve a $1.075 billion loan to help rebuild the northeast, which has been ravaged by the Boko Haram insurgency, and to expand support to the poor in Nigeria.

“There is need for urgent consideration of the identified projects, which will enable us to start reconstruction and rehabilitation of the region in other to create jobs ... and rehabilitate the schools,” he said.

China Exim bank has approved a $1.231 billion loan to modernize the rail network linking the commercial hub of Lagos in the south to the industrial city of Kano in the north and also a Lagos to Ibadan segment, the letter read.

Growth in Nigeria - an OPEC member whose economy, the largest in Africa, has been hammered by low oil prices - has been stunted for decades by a lack of investment in the road and rail network.

Nigeria is in its second year of recession, brought on by low oil prices, which have slashed government revenues, weakened the naira currency and caused chronic dollar shortages. The government aims to boost infrastructure spending to help recover from the recession.

“We fully intend to source further concession funding to ultimately upgrade this critical line to high speed standard gauge,” the letter said. “These projects form the overall plan to resuscitate the rail transport across the nation.”

Buhari said the Chinese government has told him approval of the Lagos-Kaduna railway modernization project and Lagos-Calabar, a coastal railway project, were imminent.

Additional reporting and writing by Chijioke Ohuocha; Editing by Larry King

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